Cuad 350 Midterm
BUAD 350-Midterm #1 Sample
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1)
Beautiful Boating purchases five new boats at $200 thousand each to rent to vacationing fishermen.
The firm sells its old boats to the public for $500 thousand. The net increase in GDP of these transactions was
A)
B)
C)
D)
$1,250,000.
$1,500,000.
$ 500,000.
$1,000,000.
2)
One reason that firms hire labor at the point where w = MPL is
A)
B)
C)
D)
if w > MPL, the cost (w) of hiring additional workers is less than the benefits (MPL) of hiring them, so they should hire more workers. if w < MPL, the cost (w) of hiring additional workers equals the benefits (MPL) of hiring them, so they have the right …show more content…
this individual is borrowing in the first period.
C)
D) point “C” is this individual’s consumption choice.
36)
David consumes 140 in the current period and 210 in the future period. The real interest rate is 5% per period. David's present value of lifetime consumption is
A)
B)
C)
D)
350.
340.
400.
210.
11
BUAD 350-Midterm #1 Sample
37)
If Claudette gets a permanent increase in her income of $1000 per year, she saves an extra $200 this year and consumes an extra $800 this year. If the increase in income had been temporary instead of permanent, she would have saved __________ of the extra income.
A)
B)
C)
D)
exactly $200 less than $200 more than $200 none 38)
For a borrower, an increase in the real interest rate will lead to
A)
B)
C)
D)
lower current consumption and less borrowing. higher current consumption and less borrowing. higher current consumption and less saving. lower current consumption and less saving.
12
BUAD 350-Midterm #1 Sample
Figure #1
700
U3
600
U2
500
F
400
U1
B
300
J
D
200
C
G
100
H
A
0
0
50
100
150
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1)
Beautiful Boating purchases five new boats at $200 thousand each to rent to vacationing fishermen.
The firm sells its old boats to the public for $500 thousand. The net increase in GDP of these transactions was
A)
B)
C)
D)
$1,250,000.
$1,500,000.
$ 500,000.
$1,000,000.
2)
One reason that firms hire labor at the point where w = MPL is
A)
B)
C)
D)
if w > MPL, the cost (w) of hiring additional workers is less than the benefits (MPL) of hiring them, so they should hire more workers. if w < MPL, the cost (w) of hiring additional workers equals the benefits (MPL) of hiring them, so they have the right …show more content…
this individual is borrowing in the first period.
C)
D) point “C” is this individual’s consumption choice.
36)
David consumes 140 in the current period and 210 in the future period. The real interest rate is 5% per period. David's present value of lifetime consumption is
A)
B)
C)
D)
350.
340.
400.
210.
11
BUAD 350-Midterm #1 Sample
37)
If Claudette gets a permanent increase in her income of $1000 per year, she saves an extra $200 this year and consumes an extra $800 this year. If the increase in income had been temporary instead of permanent, she would have saved __________ of the extra income.
A)
B)
C)
D)
exactly $200 less than $200 more than $200 none 38)
For a borrower, an increase in the real interest rate will lead to
A)
B)
C)
D)
lower current consumption and less borrowing. higher current consumption and less borrowing. higher current consumption and less saving. lower current consumption and less saving.
12
BUAD 350-Midterm #1 Sample
Figure #1
700
U3
600
U2
500
F
400
U1
B
300
J
D
200
C
G
100
H
A
0
0
50
100
150